Balkans Gold Ltd plans to raise $3.2 million via a non-renounceable pro rata rights issue to help fund its acquisition of West African Resources Ltd and ongoing exploration programs.
Balkans Gold Ltd plans to raise $3.2 million via a non-renounceable pro rata rights issue to help fund its acquisition of West African Resources Ltd and ongoing exploration programs.
Below is the full announcement:
Balkans Gold Limited (ASX: BNL) ("Company" or "Balkans") is pleased to announce a non-renounceable pro rata Rights Issue of fully paid Ordinary Shares in Balkans to existing shareholders to raise approximately $3.16 million before issue costs ("Rights Issue").
The Company is making the non-renounceable Rights Issue of New Shares at an issue price of $0.10 per share on the basis of two (2) shares for every three (3) shares held at the Record Date of 18th July 2008.
The maximum number of Shares which may be issued under the Rights Issue is 31,671,001 (based on the current capital structure of the Company). The new Shares will rank equally with existing Shares and the Company will apply for official quotation of the shares.
As well as providing general working capital, it is proposed that the funds will be applied to continuing the Companies ongoing exploration programs in Bulgaria including the completion of an upgrade from the existing JORC compliant resource of 109,000ozAu on the Breznik project.
Although the Rights Issue is not conditional upon settlement of the recently announced acquisition of West African Resources Limited ("WAR") it is proposed that funds will also be applied towards drilling programs and ongoing expenditure requirements for the Burkino Faso and Niger projects.
The Board confirms the Companies plan to expand its geographical asset base and to reposition the Company to take advantage of global base metals opportunities as per the announcement made on the 2nd of July 2008. Shareholder Approval will be sought for the Acquisition of WAR as well as the change of name to International Resource Holdings Limited.
The applied funding pursuant to this capital raising will ensure the completion of sufficient appraisal and exploration programs to capture the potential upside across the Companies diverse and international asset base. Initial results from the acquired WAR projects indicate the need for such programs and the Breznik and Rakitovo projects in Bulgaria also hold further potential.
By offering existing shareholders this entitlements issue the Company believes that sufficient capital will be raised to generate return for shareholders via the development of its assets.
The issue price of $0.10 per share represents a discount of 11.9% to the Volume Weighted Average Price ("VWAP") of Balkan's shares of $0.1135 over the 5 prior trading days on the ASX and a 16.65% discount to the last closing price of $0.12 per share.
